Peru’s Quiet Inflation Record Has No Match in Latin America

In a region where inflation is a recurring crisis — Argentina just printed 31.5%, Bolivia hit 20.4%, and Colombia’s 23% minimum wage hike was frozen by a court last week — Peru ended 2025 at 1.51%. That is lower than the Eurozone, lower than the United States, and the country’s best result since 2017, when it posted 1.4%. This is part of The Rio Times’ daily coverage of Peru affairs and Latin American financial news.

The figure, reported by INEI and confirmed by Bloomberg Línea’s regional year-end data, places Peru comfortably inside the central bank’s 1–3% target range and ahead of every Latin American peer: Brazil closed at 4.26%, Mexico at 3.69%, Chile at 3.5%, and Uruguay at 3.65%. Services, which account for 62% of Peru’s consumer basket, saw inflation drop from 2.8% in late 2024 to just 0.9% by December, according to Scotiabank analysis. Core inflation held steady at around 1.8%.

What makes Peru’s performance remarkable is not just the snapshot but the streak. The country has maintained single-digit inflation for nearly 29 consecutive years — the longest such run anywhere in Latin America since the 1950s, according to the BCRP. For context, Peru experienced hyperinflation above 7,000% in 1990. The turnaround since then reflects decades of institutional discipline: an independent central bank, a credible inflation-targeting framework adopted in 2002, and consistently low public debt.

The BCRP held its reference rate at 4.25% for the fourth consecutive meeting in early January, near a four-year low. Scotiabank expects one more cut in 2026 but notes the central bank wants further confirmation that inflation expectations — currently between 2.1% and 2.2% — continue to decline. The OECD projects Peru‘s 2026 inflation at 2.1%, again the lowest in the region. GDP grew 3.9% in the first quarter of 2025, and the fiscal deficit is expected to narrow from 2.2% of GDP in 2025 to 1.6% by 2027, keeping public debt among the lowest in the region.

For households, the payoff is tangible: purchasing power preserved while neighbors erode theirs. Finance Minister Denisse Miralles credited the coordination between the central bank and the executive, along with prudent fiscal management. For investors navigating a continent where price stability remains the exception, Peru offers something increasingly scarce — a macro environment boring enough to be reliable.

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